Where to stash your cash while waiting for a rate rise

Savers have pulled £100bn from fixed accounts since 2012 as they await a rate rise. By Ali Hussain

With a rate rise in the offing, it may pay not to tie up your cash (Alamy)

WOULD you lock away your cash, perhaps for several years, to achieve a better
return? It seems fewer people are willing to do so because they expect
interest rates to rise and want to be able to grab the best deals when that
happens.

The fear is that by signing up for, say, a five-year fixed-rate deal, they may
lose out on better returns that lie just around the corner.

Since 2012, almost £100bn has been withdrawn from fixed accounts. The mass
exodus to instant access accounts has been extraordinary. The total amount
held in fixed accounts has fallen for 40 consecutive months, data from the
Bank of England showed last week. By contrast, there has been a net rise in
the total held in easy access accounts for 43 of the past 44 months. Instant
access accounts today typically pay a paltry 0.8% against 1.9% on average
for fixed-rate